Skip to main content

Mutual Fund Review: UTI Infrastructure

 

 

UTI Infrastructure sticks to the theme strictly and avoid making a buy in an unrelated sector

The initiator of the theme had a great start. While it is still one of the better options in the category, it has slowed down considerably in terms of its return momentum. A fundamental reason could be simply because the fund manager has stayed fiercely loyal to the theme.

Unlike his peers, he has not taken advantage of the loosely defined nature of this theme. In fact, this fund is as close as you can get to a pure infrastructure play. Only two financial stocks have made an appearance in this portfolio, IDFC (infrastructure financing) and Srei Infrastructure Finance. No stocks from Auto (barring Ceat), Banking, Healthcare, Techonology and Media & Entertainment have appeared in this portfolio. Dongre claims to never have "fallen for the temptation of making a buy in an unrelated sector and then attempting to justify that stand or broadening the objective to include it."

 

In 2006, this fund was the best performer in the entire universe of equity funds. Come 2007 and it could not match up to the returns of its peers. The fund manager's restraint was obvious. Though the market was on a roll, he played it safe and raised large-cap exposure gradually over the year. "As fund managers we all have boundaries which are laid down to manage a fund. We have always held that in this fund we would maintain a large-cap exposure of around 60 per cent to maintain stability, and by and large, we stick by it," says Dongre. Simultaneously, allocation to Construction dropped, despite this sector rallying while Metals hovered below the category average.

 

In 2009, his cash call got extended for way too long. In the first quarter of 2009, the equity allocation (around 61%) was way below the category average. This move paid off and resulted in the fund shedding a mere 0.93 per cent that quarter (category average: -3.16%). Once the market began to rally Dongre was not convinced and was slow in upping his equity exposure. As a result the returns he delivered last year put him at the bottom spot amongst his other infrastructure peers.

 

Though Dongre adheres to a buy-and-hold strategy, he makes it clear that "Infrastructure is not about value picks. Because it is a growth story we buy stocks with a time horizon of 2-3 years."

 

Individual stock holdings have never crossed 7 per cent (barring RIL) while the number of stocks hovers at around 50.

 

Popular posts from this blog

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Birla Sun Life Mutual Fund Launches Birla Sun Life NIFTY ETF

Birla Sun Life has launched a new fund namely, Birla Sun Life Nifty ETF, an open ended exchange traded fund. The new fund will be open for subscription from 4th July to 18th July 2011, at an offer price of Rs 10 per unit. The investment objective of the scheme is to generate returns that closely correspond to the total returns of securities as represented by S&P CNX Nifty, subject to tracking errors. No exit load will be charged under the scheme. The performance of the scheme will be benchmarked against S&P CNX Nifty and will be managed by Satyabrata Mohanty.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   1) DSP BlackRock Mutual Funds: http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html   2) Reliance Mutual Funds: http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html   3) Birla Sunlife Mutual Funds: http://prajnacapital.blogspot.com/2011/...

Mutual Fund Reivew: Birla Sun Life Asset Allocation Conservative

Birla Sun Life Asset Allocation Conservative has numbers on its side to prove its credibility… Don't be surprised to find this Fund of Funds ( FoF ) in our recommendations. It has earned its place. And despite the difference in the structure of the product, there is no arguing with the numbers.   Of the total 6 years of its existence, the fund has been among the top 10 funds in its category in four of them. Last year it put up an average show and the only year it underperformed its peers was in 2008.   One aspect to look at when investing in an FoF is the expense ratio. The expense ratio of an FoF is capped at a lower limit of 0.75 per cent (2.50% for an actively managed fund). However, the FoF not only has its own expense (though lower) but even the expense ratio of the fund it is investing into. Fortunately, the fund manager takes that into account. "Expense is one of the important criteria used for fund selection and is the main reason for our investment in BSL Ind...

Short-Term Investment Options in Mutual Funds

Mutual funds offer liquid funds and ultra short term funds in the debt category, which are suitable for short investment periods. Ultra short-term funds were earlier known as liquid plus funds. Liquid funds invest in money market instruments with a maturity of 91 days or less. However, there are no such restrictions for ultra short-term funds. Who should invest in these? These are open-ended schemes. Investors with a short investment horizon or with surplus cash and low risk appetite should look at these. These could include corporate as well as retail investors. Those interested in staying invested for less than 15 days can opt for liquid funds. Retail investors who want to remain invested for two-four months, can look at ultra short-term funds. The short duration for both liquid and ultra short-term funds shields them from any interest rate volatility.   What kind of returns do they offer? In terms of an investment period less than 15 days, these funds are comparable to a ba...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now